Due in large part to softer same-store sales and customer traffic levels, the National Restaurant Association’s Restaurant Performance Index (RPI) slipped below 100 in February. The RPI stood at 99.9 in February, down 0.8 percent from January’s five-month high. February represented the fourth time in the last five months that the RPI stood below 100, which signifies contraction in the index of key industry indicators.
“The Restaurant Performance Index decline was due largely to softer sales and traffic results, which fell in February amid higher gas prices and the impact of the payroll tax hike,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “In addition, sales and traffic comparisons were more difficult due to the extra day in February 2012 as a result of Leap Year.”
“Despite the sales and traffic declines in February, restaurant operators remain generally optimistic about business conditions in the months ahead, which suggests they feel the setbacks will be temporary,” Riehle added.
The RPI consists of two components – the Current Situation Index (measuring current trends) and the Expectations Index (measuring restaurant operators' six-month outlook) - and tracks the health of and outlook for the U.S. restaurant industry.
The Current Situation Index stood at 98.3 in February – down 1.4 percent from January’s level. In addition, the Current Situation Index stood below 100 for the 6th consecutive month, which signifies contraction in the current situation indicators.
With sales comparisons more difficult in February due to Leap Year in 2012, restaurant operators reported a same-store sales decline for the first time in 21 months. Operators also reported a decline in customer traffic levels in February, with capital spending activity also dipping.
The Expectations Index stood at 101.4 in February – down slightly from January’s level of 101.6. Each of the four expectations indicators stood above 100 for the second consecutive month, which suggests restaurant operators remain generally optimistic about business conditions in the months ahead.
Although restaurant operators’ outlook for sales growth remains positive, their expectations are slightly less bullish compared to last month. Operators also continue to make plans for capital spending in the months ahead, with 57 percent planning to make a capital expenditure for equipment, expansion or remodeling in the next six months.
More details are available at Restaurant.org/RPI and Restaurant TrendMapper (subscription required).